Reserved Item Awards – Good practice or potentially not worth the paper they are printed on?

By Rob French BSc (Hons) MSc (Proj Man) FRICS, Senior Partner, Delva Patman Redler

A reserve item award is often not worth the paper it is printed on (or more often these days the megabytes it occupies on a file) if the reserve conditions prevent any or all notifiable works actually progressing without a further award being served.  Indeed, in my opinion, producing a reserve item award can possibly create no real benefit whilst at the same time creating additional fees because the surveyors make two or more awards when one would have sufficed.

Alternatively, however, if the reserve items are minor and only affect notifiable works that will occur further along the construction programme, then such a reserve item award could be justifiable and advantageous.

Another situation where reserve item awards are often justified is where funders link the release of funds to the service of Awards.  This may indicate naivety on the part of the funders, but if this condition is non-negotiable then often an Award is needed to unlock the scheme funding and allow the later stages of design and enabling works to commence.  In this situation, my view is that the building owner and adjoining owner surveyors can consider entering into reserve item awards but should ensure they make very clear to their appointing owners the limitations of such awards.

All too often building owners can get a little too excited when they have an Award (even if it is heavily laden with reserve items) and so their resultant momentum causes them to forget, either genuinely or dare I say deliberately, to secure the addendum/further award(s) required to discharge the reserve items before progressing with works.  This can put the adjoining owner in the uncomfortable position of having to decide whether or not to seek an injunction to prevent the commencement/progression of the resultant unlawful notifiable works.  To avoid such situations, it is my view that a reserve item award should therefore be avoided unless there are genuine reasons to make such an award, such as those listed above.

It is understandable that the building owner may be nervous to progress the design and push the button with a contractor before awards are in place and so will naturally push for awards to be agreed as early as possible and before designs are complete. But we must communicate to such building owners that agreeing reserve item awards in these circumstances gives them only false programme confidence, as without the reserve items discharged, they remain in reality, in the same situation.  We need to explain that it is inevitable in the way we traditionally procure most schemes that – what I refer to as – “just in time” awards/addendum awards will inevitably need be agreed only shortly before works commence, as this is natural when all designs are complete and the necessary documents required for inclusion in awards available for review.

As I am sure most of us have experienced when acting as adjoining owner surveyor, I have had many requests for a basement scheme to be agreed with the temporary works and basement method statements to be agreed as reserve items just because the building owner wants to see good progress towards party wall matters being resolved.  This to me is a pointless exercise and should of course never be entertained.  A reserve item award in this vain is, in my view, only a glorified and expensive list of matters the surveyors actually need to agree in order to make a meaningful and enabling award.

In summary, if there are genuine reasons for a reserve item award to be procured then there is no reason to avoid them but if, as we regularly see, a building owner is just putting pressure on a reserve item award being agreed to lower their anxiety, then we should make clear that there is actually no benefit.